Nusli N. Wadia Vs ACIT (Supreme Court of India)
The Supreme Court of India has declined to interfere with a Bombay High Court decision in the case of Nusli N. Wadia against the Assistant Commissioner of Income Tax (ACIT), related to a notice issued under Section 147 of the Income Tax Act, 1961 for reassessment of income. While dismissing the special leave petition, the apex court provided a specific procedural direction to the petitioner.
The case originated from a reassessment notice issued by the income tax authorities. The petitioner, Nusli N. Wadia, had approached the Bombay High Court under Article 226 of the Constitution of India, challenging this notice. However, the High Court chose not to exercise its writ jurisdiction to intervene in the matter at that stage, dismissing the petition.
Despite dismissing the petition, the Bombay High Court, considering the reply filed by the respondents (tax authorities), directed them to furnish a copy of the reasons for issuing the Section 148 notice within four weeks. The High Court stipulated that after receiving the reasons, the petitioner could respond to the notice, and the respondent would then follow due process in accordance with the law.
Upon challenging the High Court’s decision, the Supreme Court noted that the impugned order from the High Court was “non-speaking and cryptic.” However, the Supreme Court was not inclined to issue a formal notice in the special leave petition. Instead, it granted the petitioner the liberty to file a return of income under protest within one month. The court clarified that this filing would be without prejudice to the petitioner’s rights and contentions and that the petitioner could request the reasons for the Section 147 notice from the assessing officer. The Supreme Court further mandated that the assessing officer must follow the procedure outlined in the case of GKM Driveshafts (India) Ltd. Vs. ITO. The court added that in the event of an adverse order after this process, the petitioner would be free to challenge it, leaving all contentions open.
